Can a mortgage company file a 1099 when you are in default without a summary jugement?
We are residents of Texas and the property in foreclosure is in Delaware. Second mortgage holder is threatening to file a 1099.
Yes they can. TX practice is to use a Trust Deed, not a standard mortgage. No court action is needed to foreclose on a TD.
No judgment is needed to write off a bad debt and send the borrower a Form 1099-C for the COD income.
The lender has decided that you are not worth suing for the debt and is trying to use the threat of a possibly massive tax debt (that the IRS WILL collect) to prompt you into paying something towards the debt that you owe.
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Foreclosure and repossession in Delaware … |
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